How Health Benefits Adapt When the Rules Change

At the end of June, the US Supreme Court decided to overturn Roe v. Wade, sending shockwaves across the country and other parts of the world. This decision will have significant repercussions as many rules in and around healthcare will change.

This recent ruling has also overturned the case of Planned Parenthood v. Casey, leaving room for several implications in its wake. Abortion clinics face closures in almost thirteen states, while others contemplate it. There is an apparent shift in healthcare, even if most people do not realize it. 

Our previous articles discussed Price Transparency and Employee Benefits, and how Typical Healthcare Plans are Changing. How do such decisions from the Supreme Court affect employee healthcare benefits? 

We provide a guide to employee workplace benefits concerning Supreme Court and state rulings.

Pre SCOTUS Rulings

Before the Supreme Court rulings, there has been a slight variation in how each state regulates laws like abortion. However, the ability of employers to access such health benefits across state lines or the ability of workers to have access to such benefits was less in doubt. 

However, employers must review employees’ workplace protections under existing federal laws. 

Coverage for Special Services

Healthcare coverage for services typically exists in two folds: fully insured and self-insured. Employers providing fully insured coverages pay premiums to a state-licensed healthcare insurance company that will be responsible for all the risks under the policy. 

However, employees who decide to self-insure their workers will bear the risk of paying the claims incurred by the workers under the policy. 

We explore these options below:

Fully-Insured Coverage

When federal or state law prohibits a particular action within its borders, the state-licensed insurer will not be able to provide coverage for that service within that state. In light of the most recent abortion restrictions, the medical insurance provider won’t be allowed to offer such coverages.

However, these providers may have provisions for in-network providers in other states where such restrictions do not exist. Thus, they could provide out-of-state coverages and pay for those claims. 

If you want to provide this healthcare coverage to your employees, you should review the conditions with your healthcare provider. Generally, licensed insurance companies have strict compliance with state laws in order not to risk penalties. 

Self-Insured Coverage

Employers offering self-insured healthcare benefits should be able to provide such services to their eligible employees – regardless of the state laws. The ability for you to carry out such actions under self-funded healthcare plans is governed by the Employee Retirement Income Security Act (ERISA). 

The Act contains special provisions preempting state laws concerning employee benefit plans. Since the rules governing this have been unavoidably altered, it is uncertain if a state law like those that forbid abortions could be preempted by ERISA.

There are regulations underway to determine the extent to which self-insured coverages can fund cases like abortion. 

Access to Special Services

Employers offering self-insured healthcare coverages under ERISA can continue to provide those special group healthcare packages. However, you need to understand that employees residing in a state where abortions are prohibited will not be able to do so. You cannot pay for a procedure deemed illegal in the state where your workers are. 

However, if your group health plans have an in-network provider in different states, you can continue providing those coverages in states with no restrictions. 

Travel Costs for Special Cases

According to a tracker from Rhia Ventures, Target, Netflix, Disney, Procter & Gamble, and other companies have taken responsive action following the Supreme Court ruling. These companies decided to cover travel expenses to states where abortion is not outlawed within their workers’ healthcare plans. 

Employee benefits include travel and lodging expenses for the spouse or support person. Noticeably, according to a report by The Financial Post, other companies are quietly adapting their healthcare policies to accommodate travel expenses – rather than being vocal about it. 

Employer Action Steps

Make sure that appropriate talks have been held with your insurance provider before modifying your healthcare coverage for your employees. It will enable you to consider how that coverage benefits your workers and your provider’s network access. 

You can also consider some form of reimbursement or make room for travel and lodging expenses for your workers. While making these adjustments, ensure that everything remains legal in the sight of the law. 

Conclusion

The benefits that workers now want have drastically shifted over the years. We previously examined this in The Perks that Office Workers Truly Want. Many businesses are considering their options now that the rules around healthcare in your state may change. Depending on your business and employee base, this may be something to consider. 

Expense to Profit is a leading cost-reduction consultancy with a strong focus on returning money to your business. We have a proven record of supporting businesses to improve their bottom line while lowering overhead costs. 

Reach out to us to better understand your needs, and we will devise strategies to improve your cash flow.